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2001 Supreme(Cal) 774
HIGH COURT OF CALCUTTA
Pinaki Chandra Ghose, J.
Societe Dos Products Nestle, S.A. & Anr.
Vs.
"Kit-Kat" Food Product & Anr.
G.A. No. 638 of 2000 Civil Suit No. 48 of 2000
Decided on : 19th December, 2001
A prior user of a trademark has a bona fide right to use the mark and will not be liable for trademark infringement or passing off unless its use of the mark is likely to cause confusion.
Headnote:
KITKAT - TRADEMARK INFRINGEMENT - SECTION 29 OF THE TRADEMARKS ACT, 1958 - PASSING OFF - INJUNCTION - BALANCE OF CONVENIENCE - DELAY - PRIOR USE - SIMILARITY OF MARKS - LIKELIHOOD OF CONFUSION - FAIR USE OF A TRADE MARK - RECTIFICATION AND CANCELLATION OF TRADEMARKS - COPYRIGHT INFRINGEMENT - ARTISTIC WORK - SECTION 10 OF THE COPYRIGHT ACT, 1957 - COMMON LAW RIGHT - SCOPE OF MONOPOLY - REPUTATION AND GOODWILL - DECEPTION AND CONFUSION - BONA FIDE USER - DELAY IN FILING SUIT - BALANCE OF CONVENIENCE - IRREPARABLE INJURY - INTERIM INJUNCTION.
Fact of the Case:
Nestle, the owner of the Kitkat trademark, sued Kitkat Food Products for trademark infringement, passing off, and copyright infringement. Nestle claimed that Kitkat Food Products was using the Kitkat trademark and artistic work on its packaging without authorization. Kitkat Food Products defended the suit, arguing that it had been using the Kitkat trademark since 1991, prior to Nestle's use in India, and that its use of the mark was bona fide and not likely to cause confusion. Kitkat Food Products also argued that Nestle's delay in filing suit barred it from obtaining an injunction.
Finding of the Court:
The court found that Kitkat Food Products was the prior user of the Kitkat trademark in India and that its use of the mark was bona fide. The court also found that Nestle's delay in filing suit prejudiced Kitkat Food Products and that the balance of convenience favored Kitkat Food Products. The court further found that Nestle's trademark was not identical to Kitkat Food Products' trademark and that there was no likelihood of confusion between the two marks. The court also found that Kitkat Food Products had not infringed Nestle's copyright in the artistic work on its packaging.
Issues: 1. Whether Kitkat Food Products' use of the Kitkat trademark infringed Nestle's trademark rights? 2. Whether Kitkat Food Products was passing off its products as those of Nestle? 3. Whether Kitkat Food Products had infringed Nestle's copyright in the artistic work on its packaging? 4. Whether Nestle's delay in filing suit barred it from obtaining an injunction? 5. Whether the balance of convenience favored Nestle or Kitkat Food Products?
Ratio Decidendi: 1. The court held that Kitkat Food Products' use of the Kitkat trademark did not infringe Nestle's trademark rights because Kitkat Food Products was the prior user of the mark in India and its use of the mark was bona fide. 2. The court held that Kitkat Food Products was not passing off its products as those of Nestle because there was no likelihood of confusion between the two marks. 3. The court held that Kitkat Food Products had not infringed Nestle's copyright in the artistic work on its packaging because the artistic work was not original. 4. The court held that Nestle's delay in filing suit barred it from obtaining an injunction because the delay prejudiced Kitkat Food Products and the balance of convenience favored Kitkat Food Products.
Final Decision: The court dismissed Nestle's application for an injunction and directed Kitkat Food Products to keep a separate account for the sale of its products and to furnish the same to Nestle month by month until the suit was finally disposed of.
P.K. Ghose, J.
The petitioner has filed this application inter alia for an injunction restraining the defendant Nos. 1, 2 and 3 from carrying on business in the name and style of Kitkat Food Products or in any other name or style bearing the words "KIT KAT" or in any name or style bearing any word or words either deceptively similar to or identical therewith and further order of injunction be made restraining the defendant Nos. 1, 2 and 3 either by themselves, or through their men, servants or agents from either manufacturing or marketing any product including confectionery items, chocolate, cereals, preparations made from cereals and snacks under the brand name "KIT KAT" and further to disclose particulars of all sales made by them of products under the brand name "KIT KAT".
Facts of the case briefly are as follows:-
2. The petitioner No.1 is the registered owner of the trade mark and trade name "KITKAT". According to the petitioner, the said trade mark and trade name is as such the executive property of the petitioner No. 1. The petitioner No.2 is the licencee of the said trade mark and in India.
3. According to the petitioner, the defendant No.1 is carrying on business in a trade name which is exclusive property of the petitioner No. 1. The defendant Nos. 1 to 3 are manufacturing and selling chanachur and nuts under the brand name "KIT KAT", being the registered trade mark of the petitioner No.1 and the defendant No.4 carries on business as a retailer of both chocolates and chanachur and nuts within the jurisdiction of this High Court.
4. Petitioners are engaged in the manufacture and sale of an extensive range of food and other products such as cereals, milk and dietetic products, beverages including instant coffee, culinary products including pasta, noodles, sauces and soups etc. One of the many products manufactured by the petitioners are crisp wafer fingers covered with milk chocolate which the petitioners sell under the trade mark and trade name "KITKAT".
5. KITKAT was launched in the United Kingdom in August, 1935 and in 1949 the said product was recognised simply by the trade mark and trade name "KITKAT". "KITKAT" is sold in over 50 countries around the world and the sale of "KIT KAT" exceeds 225 million pound sterling a year in the United Kingdom alone.
6. In the year 1959 the petitioner No.2 was set up in India. Since then the petitioner No.2 has been engaged in the business of manufacturing and selling milk, products such as condensed milk, infant formulae, cereal foods for infants, chocolates, coffee, tea and other food preparations and beverages. Till 28th March, 1990 the petitioner No.2 was known as Food Specialities Limited. With effect from 29th March, 1990 the name of the petitioner No.2 has been changed to its present name in accordance with the provisions of the Companies Act, 1956. Since August, 1995 the petitioner started manufacturing the selling "KITKAT" in India. Since thereafter, such value has exceeded Rs.264 crores in India.
7. In the year 1998 "KITKAT" was sold in India over Rs.70 crores. The petitioners spend enormous amounts of money every year for promoting and advertising "KITKAT" all around world, including in India.
8. On pt December, 1942 Rowntree and Company Limited obtained the registration of the trade mark "KITKAT" in India in Class 30 in respect of Cocoa, Chocolate Confectionery and Chocolate biscuits under the provisions of the Trade and Merchandise Marks Act, 1940. In the year 1969, the said Company changed its name to Rowntree Mackintosh Limited. Thereafter, the name further changed to Rowntree Mackintosh Confectionery Limited which was taken over by the Nestle Group of Companies in the year 1988.
9. Pursuant to such take-over, the trademark "KITKAT" was assigned by Rowntree Machintosh Confectionery Limited in favour of the petitioner No. 1. The petitioner No.1 also obtained registration of the trade mark "KITKAT" in Class 30 in respect of Cocoa, Chocolates etc. under the provisions o
